Overview: The Harvard Business Review case study “Note on Managing High-Risk Outsourcing in Local Governments” examines the strategy of outsourcing to provide public services at a lower cost. Although hiring vendors through outsourcing seems like the most strategic decision, there are risks involved that public administrators should be aware of before entering into a contract. The case study provides a framework for public administrators on how to ensure that the services provided by a vendor meet the expectations of the municipality. Prompt: What are the strengths and challenges of outsourcing as a fiscal strategy? What are the indicators that would be used to determine if outsourcing is an appropriate strategy? How would you apply the framework that assesses risk to a typical vendor service? Specifically, the following critical elements must be addressed: ? Analyze the strengths and challenges of outsourcing as a fiscal strategy. Does outsourcing serve the public interest? Why or why not? ? Describe the indicators that can be used to determine if outsourcing is an appropriate strategy for a given municipality. ? Analyze a service typically provided by a vendor contract (e.g., waste removal, road maintenance, human resource management). Apply the HRB outsourcing risk framework outlined in the case study to the hypothetical situation that you have created. Remember to name the type of vendor service you are describing: Describe two performance measures that you could use to evaluate the performance of this vendor, and how they could be linked to a municipality’s fiscal goals of cost reduction or program efficiency. Describe how you would engage in ongoing communication and coordination with the vendor to ensure the effectiveness of the service.
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